Pantera Lithium (ASX:PFE) welcomes the 29 May decision by the Arkansas Oil and Gas Commission (AOGC) to approve the state-mandated 2.5% mineral owner minimum lithium royalty structure for brine-based lithium projects within the Smackover Formation.
The company says the royalty, initially applying to the Standard Lithium–Equinor joint venture, sets a critical commercial precedent for all developers in the region, including Pantera.
The 2.5% gross royalty is only levied once lithium carbonate, lithium hydroxide, or other lithium product is produced and sold, not at the point of brine extraction-protecting early stage economics and ensuring downstream margin retention.
Importantly, Pantera notes this royalty level is competitive on a global basis. It is materially lower than recent royalty increases imposed in jurisdictions, where fiscal changes have undermined project economics and investor confidence.
In contrast, Arkansas has reinforced its position as a tier-one jurisdiction, offering government support, community backing, and now a clear and predictable fiscal framework that supports responsible critical mineral development, the company adds.
A large portion of Pantera’s mineral leases are structured to align with the AOGC royalty regime, giving both the company and its mineral owners certainty, transparency, and a direct line of benefit from future lithium sales.
CEO Barnaby Egerton-Warburton says the AOGC’s endorsement of a structured lithium royalty is a game-changer for Pantera and all serious developers in the Smackover Basin.
“We now operate in a regime that offers clarity, fiscal stability, and policy support for lithium as a critical mineral,” the CEO says.
“Combined with the Arkansas State enacting legislation to stimulate the industries growth by offering a temporary severance tax exemption that will mean lithium producers are exempt from the state’s severance tax on saltwater brine from July 1, 2028, through June 30, 2033 – a six-year tax holiday that further enhances the economic potential of the Pantera project.
“This brings us one step closer to commercialisation and strengthens our negotiating position with partners, funders and downstream players.”
In April, the Arkansas Senate introduced Senate Bill 568, considered landmark legislation that delivers significant fiscal and regulatory incentives for lithium resource development within the state.
Pantera is a forward-looking lithium brine exploration and development company focused on developing high-grade lithium brine resources in the Smackover Formation, Southwest Arkansas.
Write to Adam Orlando at Mining.com.au
Images: Pantera
